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Abstract

Tribunals have sharply curtailed the categories of investment eligible for protection under international investment law’s keystone treaty, the ICSID Convention. This Article urges them to reverse that trend and recognize that ICSID has jurisdiction over any plausibly economic asset or activity.

Tribunals’ sudden constriction of what constitutes “investment” arises in the first instance from a widespread historical misunderstanding. Commentators have commonly acted as though the Convention’s omission of a definition for “investment” amounts to a wholesale delegation of the question to arbitral tribunals for case-by-case lawmaking. That premise is mistaken. The Convention’s travaux demonstrate that the drafters adopted a clear—and extremely broad—meaning of “investment.” It is not that all parties agreed on this broad understanding from the start. Rather, the broad definition was part of a compromise reached after long and contentious negotiations over what that definition should be. The other element of the compromise was a series of opt-out provisions by which states could narrow the Convention’s capacious baseline definition on an individual basis.

The historical arrangement properly reflects the deference that international tribunals owe to state autonomy. This Article suggests three reasons for tribunals to respect a state’s decision to extend ICSID protection to a given category of enterprise. First, the historical approach retains policy flexibility in a pluralist world occupied by diverse state actors with shifting policy preferences. Second, it delegates economic decisions to political entities that generally have a comparative advantage in both expertise and legitimacy. Third, it recognizes that the operative legal term is meant to facilitate state action, not to restrain state autonomy. This Article therefore argues that international tribunals should respect the ICSID framework as it was originally established: an adaptable vehicle with the capacity to satisfy many states’ preferences and the flexibility for individual states to change their investment policies over time.

Abstract

This Article assesses efforts in U.S. courts, principally under the federal Alien Tort Statute, to hold foreign investors indirectly liable for human rights violations committed by the governments of countries in which they do business. Such claims, though intended as remedies for international law violations, create substantial tensions with international law in two respects. First, to the extent they purport to regulate the non-U.S. activities of non-U.S. entities, they may conflict with international law principles of prescriptive jurisdiction, which limit a nation’s ability to regulate the extraterritorial activities of non-nationals. Although an exception for universal jurisdiction allows nations to punish a few especially heinous international crimes without regard to territory or citizenship, it seems difficult to establish universal jurisdiction for most indirect investor liability claims, and in any event U.S. courts appear to have lost sight of this limitation. Second, investor liability suits may misconceive the source of customary international law principles. Because customary international law arises from the actual practices of nations followed out of a sense of legal obligation, its content cannot be derived from analogies to nations’ practices in areas that are factually and normatively distinct. The only reliable evidence of nations’ practices is what nations actually have done with respect to investor liability, and there is no consistent practice of imposing indirect liability on investors for host government abuses. While international law allows the United States to impose indirect investor liability upon its own corporations, the United States cannot claim to be doing so as a matter of enforcing existing international law, as the Alien Tort Statute appears to require, nor can it—consistent with international law—impose liability upon non-U.S. entities over which it lacks prescriptive jurisdiction.

Abstract

Something of a consensus has emerged within the international community and among commentators that war crimes tribunals have been too slow to investigate, charge, and prosecute war crimes. While acknowledging the importance of expediency in international criminal prosecution, particularly for victims, this Article challenges the feasibility, and even the desirability, of quick investigations and prosecutions of war crimes. Relying on examples from the International Criminal Tribunal for the Former Yugoslavia and other tribunals, as well as literature about the processes by which societies and individuals descend into mass atrocity, this Article contends that time is often essential to the attainment of justice in this area. War crimes cases pose particular challenges in both the investigation and prosecution phases that distinguish them from even the most complex domestic cases. In addition, war crimes cases are born of significant societal disruption that can impede, on both the societal and the individual level, the emergence of evidence in the short-term. Often, a true picture of crimes will be available only after time has passed and distance has increased from the conflict. If prosecutors rush or excessively narrow the scope of cases, they risk undermining the goals of the prosecutions. In developing expectations for future war crimes tribunals, therefore, the international community must balance the desire for expediency against stubborn but necessary processes that may cause delay.

Abstract

The legitimacy of investment treaty arbitration is a matter of heated debate. Asserting that arbitration is unfairly tilted toward the developed world, some countries have withdrawn from World Bank dispute resolution bodies or are taking steps to eliminate arbitration. In order to assess whether investment arbitration is the equivalent of tossing a two-headed coin to resolve investment disputes, this Article explores the role of development status in arbitration outcomes. It first presents descriptive, quantitative research about the developmental background of the presiding arbitrators who exert particular control over the arbitration process. The Article then assesses how (1) the development status of the respondent state, (2) the development status of the presiding arbitrator, and (3) the interaction of these variables affect the outcome of investment arbitration. The results demonstrate that, at the macro level, development status does not have a statistically significant relationship with outcome. This suggests that the investment treaty arbitration system, as a whole, functions fairly and that the eradication or radical overhaul of the arbitration process is unnecessary. The existence of two statistically significant simple effects—namely that tribunals with presiding arbitrators from the developing world made smaller awards against developed states in particular circumstances—suggests that particularized reform could enhance the procedural integrity of arbitration. Irrespective of whether future research replicates the results, reforms targeted to redress possible imbalance in the system have the potential to enhance procedural justice and the perceived legitimacy of arbitration in an area with profound political and economic implications.